Electronic Arts and Take-Two Remain at an Impasse

For the fifth time in four months, Electronic Arts Inc. (ERTS) has extended its $25.74 per share tender offer for Take-Two Interactive Software Inc. (TTWO). A spokesman for the video game maker stresses that the latest move is not an expression of renewed interest but just a necessary step to allow the review process to continue.

Take-Two, meanwhile, says it is continuing to recommend that its stockholders not tender their shares, which in recent weeks have been trading slightly below the Electronic Arts offer. To date, about 11.7 million shares, or 15% of Take-Two's shares outstanding, have been tendered in favor of the deal.

In its latest statement, Take-Two said it remains committed to maximizing shareholder value and is holding "meaningful discussions with multiple parties." The company says that since March, when it initially rejected EA's bid as inadequate, its release of "Grand Theft Auto IV," as well as strong financial results, have demonstrated that the company's potential to create value is greater than the $2 billion that EA has offered.

Analysts are skeptical that EA will raise its bid for Take-Two in the absence of a higher bid from another interested buyer, or before it receives regulatory approval for the takeover. However, the company's move to extend its offer suggests it is not losing interest either. Earlier this month, EA said it would have a choice to extend its offer or walk away, and so far, it isn't walking.